Rajan Wilcox
Australia has an abundance of both fossil and renewable fuels, with fossil fuels such as oil, natural gas, and coal accounting for most of its energy supply. In 2021, coal and gas accounted for around 70% of electricity generation, with natural gas being the third-highest energy source in Australia, after oil and coal. Coal alone accounts for about 75% of Australia's electricity generation. However, Australia's energy system is undergoing significant changes, driven by economic, engineering, and environmental factors, as well as shifting consumer preferences for renewable energy sources.
| Characteristics | Values |
|---|---|
| Share of electricity generated by fossil fuels in 2021 | 70% |
| Share of electricity generated by renewable energy in 2021 | 29% |
| Main sources of fossil fuels | Oil, natural gas, and coal |
| Share of electricity generated by coal in 2021 | 75% |
| Share of electricity generated by natural gas in 2021 | 16% |
| Share of electricity generated by oil | 2.9% |
| Australia's rank in liquefied natural gas exports | 6th |
| Australia's rank in per capita energy use | 15th |
| Share of Australia's primary energy consumption from coal | 40% |
| Share of Australia's primary energy consumption from oil | 34% |
| Share of Australia's primary energy consumption from gas | 22% |
| Share of electricity generated by hydropower | 5% |
| Share of electricity generated by wind power | 2% |
| Share of electricity generated by solar power | 0.1% to 2% |
| Australia's crude oil resources location | Carnarvon and Gippsland basins |
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What You'll Learn
Fossil fuels are Australia's main energy source
Australia has large deposits of coal seam methane (CSM), primarily located in Queensland and New South Wales. The country is also one of the world's largest exporters of coal and uranium, and it ranks sixth in liquefied natural gas (LNG) exports. In 2003, coal-fired plants produced 58.4% of Australia's total energy capacity. While the share of renewable energy in Australia's electricity generation has been increasing, it still only accounts for a relatively small proportion of primary energy consumption.
Australia's transport system heavily relies on oil, some of which is imported. In 2016, oil accounted for 34% of the country's primary energy consumption. Natural gas is also widely used in Australian homes and industries. In 2021, natural gas accounted for 29% of energy production and 28% of the total energy supply. It is a significant energy source for electricity and heat generation, with lower emissions than coal.
Australia's energy system is currently undergoing significant changes driven by economic, engineering, and environmental factors. Consumer preferences are shifting towards greater independence and control over electricity supply and use. Wind and solar photovoltaics (PV) are now the cheapest forms of new electricity generation in terms of electricity produced. To meet net-zero targets, Australia aims to double the level of renewable generation each decade from now until 2050.
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Coal is used for electricity generation
Australia has historically relied heavily on fossil fuels for its energy needs, with coal and gas accounting for around 70% of electricity generation in 2021. This figure has decreased significantly from 2003, when coal-fired plants produced 58.4% of the total capacity. In 2017, coal-fired plants constituted 25.2 GWe of a total 66.5 GWe capacity, or 77% of the National Electricity Market (NEM) capacity.
The NEM is the world's most extensive interconnected power system, delivering around 80% of all electricity in Australia. It runs for over 5,000 kilometres, from North Queensland to Tasmania and central South Australia, serving more than 10 million end users. The NEM's infrastructure is made up of both state and privately owned assets, with overall direction provided by the Australian Energy Market Operator (AEMO).
While Australia is a major exporter of coal, with three times as much thermal black coal exported as is used domestically, the country is also heavily dependent on coal for electricity. In fact, Australia is more reliant on coal for electricity than any other developed country, except Denmark and Greece, with about 80% of its electricity derived from coal.
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Natural gas is used in homes and industry
Natural gas is Australia's fastest-growing energy source, accounting for 29% of energy production in 2021. It is used in homes and businesses across the country, with over 5 million households relying on it for heating and cooking. Natural gas is transported through a network of over 23,000 km of underground pipelines to reach its end users.
In 2020-21, the manufacturing sector consumed 380 PJ of gas, or about 26% of the domestic gas supply. Industrial gas consumption is primarily for heat, which is essential for various processes that support the modern economy and everyday life. LNG facilities, for example, require gas to power compressors and generate electricity on-site.
Natural gas is a crucial component of Australia's energy mix, providing electricity generation, industrial heat, and powering homes. It is a non-renewable source that emits around half the emissions of coal when used for electricity generation. However, it still contributes to Australia's greenhouse gas emissions, with GPG (gas-powered generation) producing 5.7% of the country's emissions in 2021-22.
The shift towards electrification and renewable energy sources is gaining momentum in Australia. While natural gas remains a significant energy source, there is a growing focus on reducing greenhouse gas emissions and increasing the use of low-emission energy sources. The future of natural gas in Australia will depend on its ability to remain cost-competitive and carbon-competitive.
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Oil is used for transport
Australia's energy system is currently undergoing a significant transformation, driven by economic, engineering, and environmental factors. While the country has been taking steps towards renewable energy sources, it is still heavily reliant on fossil fuels, particularly oil, for transportation.
Oil is a crucial component of Australia's transport sector, with road transport accounting for more than half (54%) of the country's liquid fuel consumption. This heavy reliance on oil for transportation has led to concerns about energy security, as Australia imports a significant portion of its oil. In 2013-14, Malaysia was the largest source of crude oil imports, accounting for 23.7% of the total, while Asia-Pacific contributed 58% of crude and refinery feedstock imports.
The high dependence on imports leaves Australia vulnerable to international prices and supply chain disruptions. This vulnerability was highlighted by Richie Merzian, Climate & Energy Director at The Australia Institute, who stated that Australia's reliance on foreign oil for fuel consumption, with 91% of its fuel linked to imports, poses a national security issue.
To address this issue, there have been calls for increasing fuel efficiency and transitioning to electric vehicles. However, the Australian government has not provided any support for electric vehicles, instead allocating over $2 billion in support payments to the country's remaining oil refineries. As a result, Australia continues to be heavily dependent on oil for its transportation needs, exposing the country to potential risks associated with international disruptions and price fluctuations in the oil market.
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Fossil fuels are non-renewable
Fossil fuels are primarily made of carbon, which is why the time period when they were formed is called the Carboniferous Period. Coal, oil, and natural gas are the most commonly used fossil fuels. They are drilled or mined and then burned to produce electricity or refined for use as fuel. Fossil fuels are used in various applications, including electricity generation, transportation fuel, and providing energy for buildings and households.
In Australia, fossil fuels have been a major source of energy. In 2021, coal and gas accounted for around 70% of electricity generation in the country. However, Australia is also rich in renewable energy sources, such as geothermal energy, wind power, and solar energy. The country is undergoing a significant transformation in its energy system, with a growing shift towards renewable energy sources. This transition is driven by economic, engineering, and environmental factors, as well as changing consumer preferences for more sustainable options.
While fossil fuels have been crucial in meeting energy demands, they are non-renewable resources. The process of forming fossil fuels takes millions of years, and once these fuels are extracted and burned, they release carbon dioxide into the atmosphere, contributing to climate change and global warming. As reserves of fossil fuels dwindle, it is essential to transition to renewable energy sources to ensure a more sustainable future.
Australia has taken steps towards reducing its reliance on fossil fuels, with wind and solar photovoltaics (PV) becoming the cheapest forms of new electricity generation. The Australian government has set targets to reduce emissions and increase renewable energy generation, demonstrating a commitment to creating a more sustainable energy future.
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Frequently asked questions
Fossil fuels are non-renewable resources that take billions of years to form naturally from the remains of ancient plants and animals. Examples include oil, natural gas, and coal.
Fossil fuels are used to power homes, cars, and industries in Australia. Coal is used to generate three-quarters of domestic electricity, natural gas is used in homes and industries, and oil is used heavily in the transport system.
Australia has an abundance of renewable energy sources, including wind, solar, wave, and geothermal energy. Bioenergy, produced from organic matter, is another significant potential energy resource.
Australia's energy system is undergoing a significant transformation, driven by economic, engineering, and environmental factors. The Australian government is committed to reducing emissions and increasing the use of renewable energy sources to meet net-zero targets.
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